SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
Overall CRM gets a fundamental rating of 7 out of 10. We evaluated CRM against 282 industry peers in the Software industry. CRM gets an excellent profitability rating and is at the same time showing great financial health properties. CRM has a decent growth rate and is not valued too expensively. This makes CRM very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year CRM was profitable.
CRM had a positive operating cash flow in the past year.
CRM had positive earnings in each of the past 5 years.
CRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CRM has a Return On Assets of 6.29%. This is in the better half of the industry: CRM outperforms 77.66% of its industry peers.
Looking at the Return On Equity, with a value of 10.23%, CRM is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
CRM has a Return On Invested Capital of 8.87%. This is amongst the best in the industry. CRM outperforms 84.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRM is significantly below the industry average of 12.28%.
The 3 year average ROIC (5.83%) for CRM is below the current ROIC(8.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROIC | 8.87% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
1.3 Margins
CRM has a better Profit Margin (16.08%) than 82.27% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM's Operating Margin of 20.50% is amongst the best of the industry. CRM outperforms 87.59% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
CRM has a better Gross Margin (77.34%) than 73.40% of its industry peers.
In the last couple of years the Gross Margin of CRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% |
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
2. Health
2.1 Basic Checks
CRM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CRM has been reduced compared to 1 year ago.
CRM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for CRM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.93 indicates that CRM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.93, CRM is in the better half of the industry, outperforming 67.73% of the companies in the same industry.
The Debt to FCF ratio of CRM is 0.67, which is an excellent value as it means it would take CRM, only 0.67 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.67, CRM is in the better half of the industry, outperforming 76.60% of the companies in the same industry.
CRM has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.14, CRM perfoms like the industry average, outperforming 50.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 4.93 |
ROIC/WACC0.82
WACC10.81%
2.3 Liquidity
CRM has a Current Ratio of 1.07. This is a normal value and indicates that CRM is financially healthy and should not expect problems in meeting its short term obligations.
CRM has a Current ratio of 1.07. This is in the lower half of the industry: CRM underperforms 71.63% of its industry peers.
A Quick Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a Quick ratio of 1.07. This is in the lower half of the industry: CRM underperforms 70.21% of its industry peers.
The current and quick ratio evaluation for CRM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.29%, which is quite good.
CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.71% yearly.
Looking at the last year, CRM shows a small growth in Revenue. The Revenue has grown by 7.97% in the last year.
CRM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.25% yearly.
EPS 1Y (TTM)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
3.2 Future
Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.04% on average per year.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.62% on average per year.
EPS Next Y12.13%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 24.98, which indicates a rather expensive current valuation of CRM.
Compared to the rest of the industry, the Price/Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 74.11% of the companies listed in the same industry.
CRM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 20.19, the valuation of CRM can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 75.53% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CRM to the average of the S&P500 Index (21.76), we can say CRM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.19 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRM indicates a rather cheap valuation: CRM is cheaper than 81.91% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CRM is valued cheaper than 82.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.58 | ||
| EV/EBITDA | 20.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CRM may justify a higher PE ratio.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 12.79% in the coming years.
PEG (NY)2.06
PEG (5Y)0.9
EPS Next 2Y11.99%
EPS Next 3Y12.79%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.64%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 33.31. CRM pays more dividend than 91.84% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
CRM does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
CRM pays out 25.00% of its income as dividend. This is a sustainable payout ratio.
DP25%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
258.07
-5.9 (-2.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change-0.1%
Ins Owners2.52%
Ins Owner Change0.5%
Market Cap246.71B
Analysts79.67
Price Target360.1 (39.54%)
Short Float %1.51%
Short Ratio1.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend1.59
Dividend Growth(5Y)N/A
DP25%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.95%
Min EPS beat(2)0.37%
Max EPS beat(2)5.52%
EPS beat(4)3
Avg EPS beat(4)2.78%
Min EPS beat(4)-2.3%
Max EPS beat(4)7.51%
EPS beat(8)7
Avg EPS beat(8)3.13%
EPS beat(12)11
Avg EPS beat(12)6.7%
EPS beat(16)15
Avg EPS beat(16)12.06%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)-0.16%
Revenue beat(4)1
Avg Revenue beat(4)-0.4%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)0.02%
Revenue beat(8)1
Avg Revenue beat(8)-0.54%
Revenue beat(12)2
Avg Revenue beat(12)-0.17%
Revenue beat(16)4
Avg Revenue beat(16)-0.11%
PT rev (1m)-0.28%
PT rev (3m)-5.88%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.67%
EPS NY rev (1m)1.49%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.19 | ||
| P/S | 6.42 | ||
| P/FCF | 19.58 | ||
| P/OCF | 18.59 | ||
| P/B | 4.08 | ||
| P/tB | 46.27 | ||
| EV/EBITDA | 20.95 |
EPS(TTM)10.33
EY4%
EPS(NY)12.78
Fwd EY4.95%
FCF(TTM)13.18
FCFY5.11%
OCF(TTM)13.88
OCFY5.38%
SpS40.22
BVpS63.23
TBVpS5.58
PEG (NY)2.06
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROCE | 10.63% | ||
| ROIC | 8.87% | ||
| ROICexc | 11.58% | ||
| ROICexgc | 390.16% | ||
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% | ||
| FCFM | 32.77% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
ROICexc(3y)7.18%
ROICexc(5y)4.68%
ROICexgc(3y)84.54%
ROICexgc(5y)53.64%
ROCE(3y)6.99%
ROCE(5y)4.55%
ROICexcg growth 3Y144.43%
ROICexcg growth 5Y51.1%
ROICexc growth 3Y136.01%
ROICexc growth 5Y54.45%
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
F-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Debt/EBITDA | 0.74 | ||
| Cap/Depr | 19.59% | ||
| Cap/Sales | 1.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.34% | ||
| Profit Quality | 203.82% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 4.93 |
F-Score8
WACC10.81%
ROIC/WACC0.82
Cap/Depr(3y)19.53%
Cap/Depr(5y)21.06%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.49%
Profit Quality(3y)1155.13%
Profit Quality(5y)786.34%
High Growth Momentum
Growth
EPS 1Y (TTM)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
EPS Next Y12.13%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
EBIT growth 1Y20.01%
EBIT growth 3Y133.52%
EBIT growth 5Y75.31%
EBIT Next Year35.67%
EBIT Next 3Y18.7%
EBIT Next 5Y15.41%
FCF growth 1Y79.03%
FCF growth 3Y33.02%
FCF growth 5Y27.52%
OCF growth 1Y68.07%
OCF growth 3Y29.7%
OCF growth 5Y24.76%